Time to chalk another one up for cryptocurrency bitcoin’s reputation as a disruptor in the financial world? Today, news comes that Coinbase — the YC-incubated startup that offers a bitcoin buying and trading platform for consumers, and APIs to developers to integrate bitcoin payments into apps and websites — has had its iOS app pulled from the App Store by Apple, less than a month after it first appeared.
It’s not clear why at this point: CEO and co-founder Brian Armstrong tells us that Coinbase is still trying to find out. “We’re not sure why it was taken down and we’ve reached out to Apple to request clarification,” he said. We have also reached out to Apple and will update this post with any response that we receive.
Coinbase also has an Android app, which is still live in Google Play.
There are some historical hints to why the app may have been taken down. The Coinbase app let users track their bitcoin activity on Coinbase, but it also worked as a “wallet” where users could buy, send and receive bitcoins.
As executive director of the Bitcoin Foundation Jon Matonis has pointed out in the past, other bitcoin wallet apps like Blockchain Wallet and BitPak have not fared well on the App Store, getting “unceremoniously evicted”, with Apple noting that they needed to “comply with all legal requirements in any location where they are made available to users.” There are still, however, apps to transact in bitcoin still in the App Store if you look for them.
The reference to complying with laws, in any case, has been a confusing one. Right now there are no bitcoin-specific laws in countries like the U.S., although it may only be a matter of time, it seems, before these start to appear. On the other hand, while not outlawed itself, bitcoin has come to be associated with illicit transactions like buying illegal drugs, so it may be this that Apple has in mind.
The amount transacted in bitcoin — a decentralized currency generated by bitcoin-mining computers — is today small in comparison to the what is transacted globally in dollars, euros and other established, national currencies; but it’s caught the attention of enough speculators, legit users, and those who are genuinely curious, to see its price rising sharply at the moment. As a point of comparison, when Coinbase first launched its iOS app in October, the price of a bitcoin was about $200. At the time of writing this post, the buy price is $419.74 and rising.
Still, the existence of Coinbase itself is a sign of changing times for bitcoin, which is becoming an evermore mainstream service — Coinbase integrates with U.S. banks so that consumers can easily link their normal accounts with those they create on Coinbase. Right now, it says that some 12,000 merchants are using its API and that there have been some 386,000 wallets created on the platform.
And crucially, Coinbase is also increasingly getting embraced by the technology powers that be. Incubated and backed by Y Combinator, Coinbase has raised just under $7 million since 2012, with other investors including top VCs like Union Square Ventures, SV Angel and Funders Club. Fred Wilson of USV highlighted one of the key, attractive points for why bitcoin is potentially very disruptive for established payment platforms and currencies: “If I’m sending you money, why should that cost me or anyone?” he asked during an appearance at Disrupt in New York earlier this year.
Indeed, one of the big attractions with bitcoin, and Coinbase, has been the way that it circumvents some of the payment fees associated with more established currencies and payment platforms. Coinbase processes the first $1,000,000 of merchant orders for free, it says, with a flat 1% fee after that. “Combined with no chargebacks by nature in Bitcoin, this provides significant savings to merchants who are paying 3% plus to credit card fees,” the company notes.